Profit and Loss Formulas | List of Profit and Loss Formulas You Should Know - BYJUS

# Profit and Loss Formulas

The difference between the original price and the selling price of a product defines the loss or the profit that has been made on that product. If the difference is positive, then the seller makes a profit. But if the difference is negative, then, the seller makes a loss on the product being sold. In this article, we will learn about the formulas related to profit and loss....Read MoreRead Less

### What is Profit?

Profit is defined as the resultant difference in the amount when a product is sold for a price more than the original price. In simple words, if the original price is less than the selling price then the seller makes a profit on that product.

### What is Loss?

Loss is defined as the difference in amount that is obtained when the seller sells a product for a price lesser than the original price. In simple words, if the original price is greater than the selling price then the seller has made a loss on that product.

### Original Price

The original price of a product is the actual asking price for a product by a seller from the customer.

### Selling Price

The selling price of a product is the amount received from the customer, either more than the original price, or, less than the original price, by the seller for a product.

### Formulas Related to Profit and Loss

• Profit = Selling Price – Original Price

• Loss = Original Price  –  Selling Price

• Profit Percentage = $$\frac{Selling~Price~-~Original~Price}{Original~Price}$$ x 100%

• Loss Percentage = $$\frac{Original~Price~-~Selling~Price}{Original~Price}$$ x 100%

### Solved Examples

Example 1: The price of a water bottle is $15 and the seller sells it at$17. What is the profit gained by selling the water bottle? Solution:

The original price of the bottle is $15 and selling price is$17.

The profit can be calculated by using the profit formula.

Profit = Selling Price – Original Price                       [Profit formula]

= $17 –$15

= $2 Hence, the profit gained by selling the water bottle is$2.

Example 2: John sold his bike for $3650 and that too at a loss of$350. What is the original price of the bike? Solution:

The selling price of the bike is $3650 and the loss is$350.

The original price of the bike can be calculated using the loss formula.

Loss = Original Price – Selling Price               [Loss formula]

$350 = Original Price –$3650                       [Substitute the values]

Original Price = $350 +$3650 = $4000 Therefore, the original price of the bike is$4000.

Example 3: Find out the loss percentage when a product is sold out at $2250 and its original price is$2400.

Solution:

The selling price of the product is $2250 and its original price is$2400. The loss percentage can be calculated by using the formula for loss percentage.

Loss Percentage = $$\frac{Original~Price~-~Selling~Price}{Original~Price}$$ x 100%          [Loss percentage formula]

= $$\frac{2400~-~2250}{2400}$$ x 100%                                                            [Substitute the values]

= $$\frac{150}{24}$$ %                                                                               [Simplify]

Hence, the loss percentage is 6.25%.

Example 4: John went to buy a shirt with an original price of $500. While selling the shirt the shop keeper made a profit of 8%. What is the selling price of the shirt? Solution: The original price of the shirt was$500 and the shopkeeper made a profit of 8%. The selling price can be calculated by using the formula for profit percentage.

Profit Percentage = $$\frac{Selling~Price~-~Original~Price}{Original~Price}$$ x 100%        [Profit percentage formula]

8% = $$\frac{Selling~Price~-~500}{500}$$ x 100%                                             [Substitute]

8 = $$\frac{Selling~Price~-~500}{5}$$                                                            [Simplify]

8 x 5 = Selling Price – 500                                                [Cross multiply by 5]

Selling Price = 40 + 500 = 540

So, the selling price of the shirt is \$540.